Investors compete with 1st home buyers

Here is an interesting graph on the type of properties owner-occupiers and investors buy, based on national sales for past 12 months.

Assuming that 1st home buyers are buying in at the lower end of the market, then there is direct competition between them and investors. The irony is that the investors are buying the houses that 1st home buyers will have to rent.

Malcolm Turnbull wants housing affordability to be an election issue but at the same time decries Labor’s negative gearing policy because it will reduce house prices. Talk about having your cake and eating it too!

The problem with housing affordability is that it is very difficult to make significant inroads into the problem. Increasing average wages while housing prices remain relatively steady is one way. But wage growth is an record lows so that doesn’t appear to be solution that will work in the short term.